Energy

Proponents of a controversial plan to build a high-voltage electricity export line from Tajikistan to South Asia argue that the connection – known as CASA-1000 – will not be used in winter, when the country’s own citizens suffer debilitating electricity shortages.

But a senior Tajik official has undermined that promise, arguing that no matter how little it has for itself, Tajikistan must export electricity year-round lest any transmission equipment be looted.

Most regions of Tajikistan are currently receiving about 12 hours of electricity per day; some areas get less than 10 hours and, as anyone in remote areas can attest, the current is often so weak that it cannot charge a cell phone.

Despite these extended blackouts, Tajikistan increased its electricity exports to Afghanistan through existing lines from 30 million kWh in January 2014 to 55 million kWh last month, Asia-Plus reported on February 17, citing the State Statistics Agency.

Many ask the obvious question: Shouldn’t a country’s resources first serve its own people?

After years of speculation, now we have the answer. The head of the state electricity monopoly, Barki Tajik, says that the company must export in winter because it cannot risk allowing existing infrastructure to stand idle. “We keep the voltage in these lines because there is a high probability of equipment theft,” the Asia-Plus article quoted Rustam Rakhmatzoda as saying.

That confession should impact CASA-1000, which has been on the drawing board since 2007.

Russia is behind schedule implementing billions of dollars of critical hydropower projects on the Naryn River.

A top official in Kyrgyzstan has grumbled that Russia is far behind schedule implementing billions of dollars of critical hydropower projects in the energy-starved country.

The giant Kambar-Ata 1 hydropower dam and the Upper-Naryn Cascade of four smaller hydropower dams were supposed to be well on their way to completion by now. Moscow and Bishkek signed deals for their construction in August 2012. As part of the package of related agreements, Moscow secured a 15-year extension on its military facilities in the Central Asian country after the current lease expires in 2017.

But according to Kyrgyz Energy Minister Kubanychbek Turdubayev, nothing much is happening. Speaking at a ministry meeting on February 12, in comments carried by Vechernii Bishkek, Turdubayev said:

We have been barraged with criticism over [energy] projects. People can see no real progress in such projects as [the construction of] two Kambar-Ata hydroelectric power plants and the Upper-Naryn Cascade of hydroelectric power plants. It should be admitted that there are serious omissions. Kyrgyzstan's rights have been violated and there is no progress. […]

Getting reliable economic information out of Turkmenistan is difficult at the best of times, so if the gas-rich country is on the verge of a crisis, the secretive leadership is unlikely to drop any hints.

But a number of recent reports suggest that the effect of falling energy prices is being magnified by limited official information.

Opposition-minded news websites Alternative News Turkmenistan and Chronicles of Turkmenistan have reported long queues stretching out of currency exchange bureaus in recent days. The panic, note both outlets, is based on a rumor that the manat is about to be significantly devalued again.

The manat already fell 19 percent on New Year’s Day, falling from 2.85 to 3.5 manats against the greenback. The rumors point to an alarming 4.5 to the dollar. According to the Chronicles of Turkmenistan:

In recent days queues have been forming at various banks from early in the morning. In the regions, only 40-45 people are able to obtain the dollars at each bank, even though the queues extend to 200 or more people. Then the [people in the queue] are informed that there are no more dollars for the rest of the day.

Passports are required at the point of exchange. Each person can obtain no more than $1,000 in a single day.

Astana has promised to save Kyrgyzstan from near-certain energy crisis this winter, committing to supply over a billion kilowatt-hours of electricity and releasing several Kyrgyzstan-bound oil tankers stuck on the border between the two countries since April. But questions remain about the terms of the deal signed by Kazakhstan’s Nursultan Nazarbayev and Kyrgyzstan’s Almazbek Atambayev on November 7.

Chiefly, how will Kyrgyzstan finance the difference between the cost of the electricity it is buying from Kazakhstan and the low rates its own citizens expect to pay—lower, according to energy officials, than the cost of production?

In other words, Kyrgyzstan has agreed to pay Kazakhstan far more than it charges its citizens per kilowatt-hour. Most of the energy will be subsidized by the impoverished government, Nurbek Elebaev, director of Kyrgyzstan’s State Department for the Regulation of the Fuel and Energy Complex, told Vechernii Bishkek on October 31. (Note: $1 is about 58 soms at current rates.) He said:

It is worth noting that the cost of the imported energy is 5.13 soms for a kilowatt-hour. Accordingly, every kilowatt-hour will be subsidized [by Kyrgyzstan] by around 3 soms. Moreover, 5.13 soms is the cost of electricity up to the Kazakh border. The cost of transit from the border to the consumer will be borne by [Kyrgyzstan’s] energy company. How the company will cover the financial deficit will be decided by the government. The cabinet will need to borrow money. This tariff will apply to 1 billion kilowatt-hours of electricity. A further 400 million kilowatt-hours will be determined by an exchange in kind.

With a cold, dark winter inching closer each day in Kyrgyzstan, the government is desperately trying to strike bilateral energy-import agreements with anyone and everyone. But as policymakers go hunting around Central Asia to plug an estimated deficit of over 2 billion kilowatt-hours, prices and political differences are potent sticking points.

Any bilateral deal would require the differential in electricity costs be borne either by the insolvent government, or by ordinary Kyrgyzstanis, who are accustomed to paying $0.015 per kilowatt-hour. That’s far below the cost of production and substantially less than citizens pay in any other Central Asian country.

So Kazakh electricity, which costs around four times as much for Kazakhs, is expensive to most Kyrgyz, although that didn’t stop Astana and Bishkek agreeing to an import deal in principle last week. Tajik electricity is over one-and-a-half times as expensive as the Kyrgyz version and it is doubtful whether a country whose own rural residents spend a lot of time in the dark has any power to spare.

The perfect cure to a Kyrgyz winter of misery, then, could come from gas-rich Turkmenistan.

For the second time in two months, a company behind a foreign-operated hydropower dam in Tajikistan has said the state-controlled electricity distributor is not paying its bills. And despite the annual winter electricity shortage, this time the company – in this case Iranian rather than Russian – has shut operations until it gets its money, Radio Ozodi reports.

A source at the Iranian Embassy in Dushanbe told Radio Ozodi that the company behind Sangtuda-2, Sangob, has stopped the dam’s output until Barqi Tojik, the chronically broke state-run energy distributor, begins paying its $28 million debt (which is growing by $2 million a month). Ozodi says the company’s offices in Dushanbe are empty.

Barqi Tojik didn’t clearly answer Asia-Plus’s questions about what’s happening at the dam on the Vakhsh River. Yet whether or not it is operating, Barqi Tojik’s ongoing failure to pay its bills underscores systematic problems in Tajikistan’s troubled energy sector.

The conflict is eerily similar to an episode last month, when Tajikistan’s second-largest hydropower plant, Russian-controlled Sangtuda-1, threatened to shut down for similar reasons. That dispute was resolved when the two sides agreed on a payment installment plan.

Just as Tajikistan’s annual winter energy crisis begins, the country’s second-largest hydropower dam may be forced to shut operations due to what the Russian-controlled company that owns the dam calls unfair treatment by authorities.

Tajikistan’s state electricity-distributing monopoly, Barqi Tojik, has been refusing to pay the company, Sangtuda-1, for its power. This seems to have left Sangtuda-1 short on cash to pay its taxes, so the state tax committee has frozen the company’s accounts in Tajikistan, the company says.

Authorities in Uzbekistan’s capital, Tashkent, have ordered local eateries to switch to alternative sources of fuel, such as coal and wood, in a bid to ease energy shortages this winter.

The measure was prompted by a surge in the consumption of gas for heating, Uzmetronom.com reported this month, and marks the start of Uzbekistan’s annual energy crisis.

Uzmetronom, which is believed to have ties to the security services, said cafes and restaurants in Tashkent would most likely use condensed natural gas sourced privately in bottles, rather than from government-run mainlines, for cooking. Others will burn wood. The Moscow-based Fergana News website reported on November 21 that "an increasing crisis in gas supplies and deliveries" had led to “skyrocketing” wood prices.

Drivers in Uzbekistan have long complained about gasoline shortages. With little explanation, it seems the secretive government is trying to address mounting domestic gasoline shortages and panic at local petrol stations.

It’s unclear how large the increase will be, however. Repeated calls to Uznefteprodukt went unanswered on November 12. The company’s website confirms the plans for imports, but does not name figures.

Oil output in Uzbekistan fell from 78,000 barrels per day (bpd) in 2010 to 68,000 bpd in 2012, according to the BP Statistical Review of World Energy for 2013, largely due to aging infrastructure and limited investments. Over the same period, consumption increased from 75,000 bpd to 82,000 bpd, BP said.

Uznefteprodukt has dismissed reports of hours-long queues at gas stations in Tashkent, blaming “rumors” for fears that petrol prices, which are strictly controlled by the state, would soon rise. But EurasiaNet.org has seen queues, which are ongoing.

Details were not immediately released, but the report said the deals included contracts in the oil and gas industry, where Sino-Uzbek economic cooperation has been expanding since Uzbekistan started exporting gas to China in September 2012, and also agreements in the uranium sector, which Tashkent is eager to develop.

Other deals covering trade, energy, investment and financing were also signed, a report on the People’s Daily website added. Uzbek media, which are notoriously slow to react to events, had not reported the deals by late evening on September 9; neither had the presidential or Foreign Ministry websites.

During his visit Xi called for China and Uzbekistan to boost bilateral trade, which stood at $3.4 billion last year, to $5 billion by 2017. Xi suggested opening negotiations to set up a Sino-Uzbek free trade zone, and looking at measures to promote infrastructure connectivity between the two countries, which do not share a direct border but are linked via Kazakhstan or Kyrgyzstan.